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Tesla unveiled on Tuesday its intention to build a plant in Shanghai to dramatically increase its production capacity, with boss Elon Musk making the biggest overseas move of his electric car business even though it 's not enough. a US-Chinese trade battle is heating up. The factory, which had been under construction for a year, would ultimately have an annual production capacity of 500,000 cars, and he hoped that it would be "completed very soon".
The announcement of Tesla's new venture comes in the United States. Companies face pressure from US President Donald Trump to keep manufacturing jobs at home, and Beijing and Washington are fighting over the terms of an exchange that last weekend dramatically increased the price of imported Teslas sold in China.
the announcement contained no details of the cost of the plant or how it would be financed.
China is already the largest electric car market in the world and is expected to continue to grow partly thanks to a favorable glove "Shanghai will be the site of the first gigafactory outside the United States," said Musk in a statement issued by the company and the Shanghai government
. Lingang District, "will be a state-of-the-art vehicle plant and model for sustainability.We hope it will be completed very soon."
A Tesla spokesperson said the company it expected construction to begin "in the near future", with production beginning two years later and another three years before full production. "Tesla is deeply committed to the Chinese market, and we are looking forward to building even more cars for our customers here," said spokesman
"The announcement of today will not have an impact on our US manufacturing activities.
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Last year, the company had announced that it was working with officials in Shanghai to establish an electric car and battery manufacturing plant.
But the announcement comes at a sensitive time in the US-China trade relationship.
Trump of years criticized what he calls sly economic treatment on the part of Beijing US, the US trade deficit with China rose to a record $ 375.2 billion (about After months of tension, sta negotiations rt-stop and some Chinese concessions, the United States has put pressure on customs duties of 25 percent on annual imports of Chinese machinery, electronics and high-tech 25 billion dollars. technology equipment, including cars, computer hard drives and LEDs.
The move triggered immediate and dollar-for-dollar retaliation by China. These rates brought the price on Tesla Model S to $ 142,000 versus about $ 115,000, according to 24-7 Wall Street.
"It was expected that Tesla will open a factory in China," said Efraim Levy, an analyst. at CFRA Research. "It turns out that it is now that you have the ongoing trade dispute. I think it's really a coincidence."
Levy said hope the trade dispute would be resolved early next year, but "putting a factory in China prevents future tariff increases from having an impact."
China generally requires foreign car manufacturers to establish joint ventures with Chinese companies when they establish manufacturing plants. But the joint statement describes the factory as a "hundred percent property" of Tesla.
Analysts noted that the announcement did not indicate the cost of the plant, nor how it would be financed.
Note from 24-7 Wall Street said the $ 2.7 billion in cash on Tesla's balance sheet at the end of the first quarter seems barely enough, "but the company would probably not have any difficulty raising funds in China. "
Tesla announced in June that it was dropping by 9% According to Musk, job cuts would not affect an ambitious program to build its Model 3 sedan that was closely watched by Wall Street
. Domestic and foreign automakers have set out to conquer some of China's electric car sector, which is expected to continue to grow rapidly as the government promotes cleaner technologies, partly to combat chronic air pollution .
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